1 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR WPC No. 280 of 2022 Order Reserved on 30.4.2025 Order Passed on 30.06.2025 1 - M/s. Limra Trade Link, A Proprietorship Firm Through Its Proprietor Smt. Shabana Begam, W/o Haji Irfan Ahmed, Aged About 36 Years, R/o. Ward No. 6, Amarkantak Road, Near Madina Masjid, Pendra Road, District Gorela - Pendra Marwahi (C.G.) Through Its Power Of Attorney Holder Namely Irfan Ahmed, S/o. Late Jamil Ahmed, Aged About 43 Years, R/o. /o. Ward No. 6, Amarkantak Road, Near Madina Masjid, Pendra Road, District Gorela - Pendra - Marwahi Chhattisgarh, District : Gaurela-Pendra-Marwahi, Chhattisgarh ... Petitioner versus 1 - State of Chhattisgarh, Through - Principal Secretary, Forest Department, Mahanadi Bhawan, Mantralaya, Capital Complex, Atal Nagar, Nawa Raipur, District Raipur Chhattisgarh, District : Raipur, Chhattisgarh 2 - Principal Chief Conservator of Forest, Chhattisgarh Raipur, District Raipur Chhattisgarh 3 - Chhattisgarh State, Minor Forest Produce (Trade And Development) Cooperative Federation Limited, Through Its Managing Director, Chhattisgarh State Minor Forest Produce, Trade And Development) Cooperative Federation Limited, Van Dhan Bhawan, Atal Nagar, Raipur, District Raipur Chhattisgarh 4 - Managing Director, Chhattisgarh State Minor Forest Produce (Trade And Development) Cooperative Federation Limited, Van Dhan Bhawan, Atal Nagar, Raipur, District Raipur Digitally signed by GOPAL SINGH Date: 2025.07.02 19:14:30 +0530 2 Chhattisgarh 5 - Chief Conservator of Forest And Ex-Officio, Chief General Manager, Forest Produce Association, Bilaspur, Forest Circle, Bilaspur Chhattisgarh ... Respondents For Petitioner : Shri Manoj Paranjpe, Advocate For State/Respondents No.1, 2 and 5 : Ms. Upasana Mehta, Dy. GA For Respondents No.3 and 4 : Shri A.S. Kachhawaha, Advocate Hon’ble Shri Justice Amitendra Kishore Prasad C A V Order 1. By way of this petition, the petitioner has challenged order dated 23.12.2021 by which the petitioner has been black listed for a period of 5 years without issuance of any notice and without granting any opportunity of being heard. According to case of the petitioner a tender notice was published for disposal of various Tendu Patta Units in the Chhattisgarh State Gazette Notification dated 21.7.2020 inviting tender from prospective purchasers of Tendu Leaves including Lot No.0763 Sirmina for Forest Division Katghora- Korba, Bilaspur Circle on certain terms and conditions. The provisions of Chhattisgarh Tendu Patta (Vyapar Viniyamn) Adhiniyam, 1964 (for short ‘the Adhiniyam, 1964’) and the rules made thereunder would be applicable for the said tender and accordingly under Section 12 of the said Adhiniyam, 1964 tender was invited. The petitioner firm submitted tender for purchase of Tendu Leaves. The rate quoted by the petitioner 3 firm is Rs.5825 per STD bag. Since it was highest rate as stood vide letter dated 20.8.2020 the petitioner was appointed purchaser and was directed to execute an agreement to this effect. The petitioner deposited Rs.75,000 as scrutiny amount. According to the agreement the petitioner was required to deposit the amount in four equal installments. There was a condition prescribed that in case the petitioner fails to deposit the amount in four installments then the agreement will be cancelled and the same will be revived on certain terms and conditions. Due to pandemic Covid 19 the petitioner as well as the other purchasers were in default. As such the petitioner availed sub clause B of (iv) of the condition No.13 as such vide letter dated 5.4.2021 the petitioner was permitted to deposit the amount in four installments and has received the purchase agreement till 31.12.2021. Since the petitioner could not deposit the purchase amount the agreement was cancelled automatically. Subsequently, vide order dated 23.12.2021 order of black listing was passed for a period of 5 years and the petitioner has been declared undesirable contractor. 2. Learned counsel for the petitioner argued that even if the petitioner fails to fulfill certain terms of the agreement and even if it is required to be black listed the condition precedent would be to give a show cause notice to her, to receive her reply and to give an opportunity of hearing before passing the order of black listing. After black listing the amount deposited 4 by the petitioner to the tune of Rs.13,36,801 is going to be forfeited as the subsequent purchaser has purchased the bag for a sum of Rs.1592 per STD bag due to which according to the respondents authorities they have suffered a loss. It was further argued that the petitioner is ready and willing to purchase the Tendu Leaves but she was not permitted. Since the petitioner has not refused to purchase the Tendu Leaves and due to various reasons she could not deposit the amount of Tendu Leaves as per conditions of agreement as such she may be granted opportunity so that she may purchase the Tendu Leaves and the respondents authorities may be directed not to recover difference of amount from the petitioner and forfeiture of the amount deposited by the petitioner. It was argued that since the order of black listing was passed without any show cause notice or without any opportunity of hearing as such the petitioner may be granted reliefs as sought by her: “1] That, this Hon’ble Court may kindly be pleased to writ/writs, order/orders, direction/directions, quashing the impugned order dated 23.12.2021 (Annex.P/1) and the Hon’ble Court may further be pleased to set-aside the order dated 14.12.2021 and 31.12.2021 passed by the respondent authorities. 2] That, this Hon’ble Court may kindly be pleased to writ/writs, order/orders, direction/directions and the authorities may kindly be directed to reconsider the case 5 of the petitioner and offer of the petitioner may kindly be accepted or in the alternative the respondents may kindly be directed to refund the amount of Rs.1336801/- deposited by the petitioner. 3] That, this Hon’ble Court may kindly be pleased to grant any other relief(s), which is deemed fit and proper in the aforesaid facts and circumstances of the case.” 3. Learned counsel for the petitioner submits that due to Covid 19 situation she could not deposit the amount as required to be deposited as per clause of agreement. Subsequently, even she has made an application, however, even though she could not deposit the amount, but, she is ready and willing to purchase the Tendu Leaves and she is ready and willing to deposit the amount. As such the order of black listing for a period of 5 years may be quashed. It was urged that even if the petitioner is found to be guilty by the authorities for non- adherence of conditions of agreement, order of black listing cannot be passed without issuance of notice and without granting of any opportunity of hearing. 4. Learned counsel for the petitioner places reliance on the judgment of the Hon’ble Supreme Court in the matter of UMC Technologies Private Limited v. Food Corporation of India and another, reported in (2021) 2 SCC 551, in which it has been held as under: 6 "21. Thus, from the above discussion, a clear legal position emerges that for a show cause notice to constitute the valid basis of a blacklisting order, such notice must spell out clearly, or its contents be such that it can be clearly inferred therefrom, that there is intention on the part of the issuer of the notice to blacklist the noticee. Such a clear notice is essential for ensuring that the person against whom the penalty of blacklisting is intended to be imposed, has an adequate, informed and meaningful opportunity to show cause against his possible blacklisting. 25. The mere existence of a clause in the Bid Document, which mentions blacklisting as a bar against eligibility, cannot satisfy the mandatory requirement of a clear mention of the proposed action in the show cause notice. The Corporation's notice is completely silent about blacklisting and as such, it could not have led the appellant to infer that such an action could be taken by the Corporation in pursuance of this notice. Had the Corporation expressed its mind in the show cause notice to black list, the appellant could have filed a suitable reply for the same. Therefore, we are of the opinion that the show cause notice dated 10.04.2018 does not fulfill the requirements of a valid show cause notice for blacklisting. In our view, the order of blacklisting the appellant clearly traversed beyond the bounds of the show cause notice which is impermissible in law. As a result, the consequent blacklisting order dated 09.01.2019 cannot be sustained." 7 5. Learned counsel for the petitioner further places reliance on the judgment of the Hon’ble Supreme Court in the matter of Techno Prints v. Chhattisgarh Textbook Corporation and another, reported in 2025 SCC OnLine SC 343, in which it has been held as under: "30. Therefore, the Authority is expected to be very careful before issuing a show cause notice. It is expected to understand the facts well and try to ascertain what sort of violation is said to have been committed by the contractor. As noted above, there is always an inherent power in the Authority to blacklist a contractor. But possessing such inherent power and exercising such power are two different situations and connotations. There may be a power but there should be reasonable ground to exercise such power. 33. As observed by this Court in Erusian Equipment & Chemicals Ltd. v. State of W.B., (1975) 1 SCC 70, an order of blacklisting casts a slur on the party being blacklisted and is stigmatic. Given the nature of such an order and the import thereof, it would be unreasonable and arbitrary to visit every contractor who is in breach of his contractual obligations with such consequences. There have to be strong, independent and overwhelming materials to resort to this power given the drastic consequences that an order of blacklisting has on a contractor. The power to blacklist cannot be resorted to when the grounds for the same are only breach or 8 violation of a term or condition of a particular contract and when legal redress is available to both parties. Else, for every breach or violation, though there are legal modes of redress and which compensate the party like the Corporation before us, it would resort to blacklisting and at times by abandoning or scuttling the pending legal proceedings. 34. Plainly, if a contractor is to be visited with the punitive measure of blacklisting on account of an allegation that he has committed a breach of a contract, the nature of his conduct must be so deviant or aberrant so as to warrant such a punitive measure. A mere allegation of breach of contractual obligations without anything more, per se, does not invite any such punitive action." 6. On the other hand, learned counsel for the respondents No.3 and 4 submits that since the petitioner has not complied with the conditions of agreement and has not deposited the amount as required under the agreement even though she was granted opportunities as such the petitioner is well aware of the fact and accordingly due to non-compliance of the conditions of agreement as the order impugned has rightly been passed. In the purchase agreement itself everything has been stated in black and white . The petitioner is aware about the same. As such she cannot claim that it was passed without granting any opportunity of hearing. The order of black listing has rightly been passed. Earlier she was issued 9 notice on 13.1.2021. However, she has failed to deposit the amount as per agreement. A recommendation was made on 5.3.2021 to cancel the agreement executed between the parties upon which on 5.3.2021 a further notice was issued for deposit of the amount, however, when it has again not deposited then on 16.3.2021 the agreement was cancelled. Earlier also on 5.4.2021 the agreement was revived. The last date which was on 30.9.2021 for payment of rest of the amount, however, it has not been deposited, as such despite giving proper opportunity, when the amount was not deposited, order of blacklisting dated 23.12.2021 was passed. There is no illegality and the petitioner was given sufficient opportunity of being heard. Notices have been issued, however, the petitioner has failed to deposit the amount. 7. Learned counsel for respondents No.3 and 4 further submits that since the show cause notice was earlier given to the petitioner in this regard, the requirement of a separate show cause notice is not required the loss of respondent for resale of Tendu leaves the terms and condition of the contract/agreement the answering respondent is entitle to recover the same. In an identical matter, i.e., Mulamchand v. State of Madhya Pradesh, reported in AIR 1968 SC 1218, the Hon'ble Supreme Court has considered this aspect. In view of the judgment passed by this Court in WPC No.1548 of 2012 (Shri Narayan Agrawal v. State of Chhattisgarh and others), this Court observed that "Since the petitioner 10 has deviated from the agreement and has left purchasing of Tendu Leaves as such according the conditions of the tender, the petitioner is liable to pay the amount of loss suffered by the respondent federation. Though the petitioner has filed other petition also no relief has been granted in the earlier litigation also. The petitioner by his own act has committed negligence and from the procedure adopted by the respondent authorities, it does not transpires that any illegality or infirmity has been committed by the respondent authorities as such the impugned order issued by the concerned respondent is within the jurisdiction and stipulated in accordance with law. There is an hardly scope of interference under Article 226 of the Constitution of India.” In light of the observations made by this Court, learned counsel for respondents No.3 and 4 submits that the instant writ petition deserves to be dismissed. 8. I have heard learned counsel for the parties and perused the record as also the impugned orders. 9. The petitioner company came into the purchase of Tendu Patta Lot no.763, Tendu Patta Samiti Sirmina, Katghora-Korba, Forest Circle Bilaspur. The petitioner came into agreement on 14.09.2020 as per clause 5(A) of the agreement, the schedule of payment and delivery of leave is described, which is reproduced hereunder for ready reference: 11 “5. Manner of payment of amount due and delivery of card– (A) WHEREAS the purchaser ….. has been appointed as the purchaser for ..... (here indicate number) lot/lots and is willing to take delivery lot wise and has applied for permission to make a single contract for all the lots, therefore this contract is made for all the said lots. The total purchase price (excluding tax/cess) of all the lots comprised in this contract as mentioned in clause 21 of this contract shall be deemed to be the purchase price for the purpose of this contract and one fourth of this amount shall be the amount of each instalment (excluding tax/cess) (strike out if not specified). The buyer shall pay the amount due i.e. full purchase price including taxes payable in four equal installments in the office of the Managing Director, District Union, in the name of the Managing Director, Chhattisgarh Minor Forest Produce (Trading and Development) Cooperative Federation Limited, at any bank at the places mentioned before the District Unions in Appendix-VI by Bank / Demand Draft of any scheduled bank payable at the branch on or before the following dates: Installment Date of Amount Other Yog Goods 12 payment of installment of due amount of purchase price Signature Fees, Late Fees, Revival Fees etc. and Services Tax 1 2 3 4 5 6 First 15.10.2020 Second 16.11.2020 Third 15.12.2020 Fourth 15.1.2021 Income tax of Rs. has to be paid along with the payment of each installment. The installment of Rs. will also have to be paid. In case of any subsequent amendment in the above- mentioned taxes/cess, income tax, and other taxes, the revised amount, as the case may be, will be payable by the buyer. The security deposit paid as per the provisions of the tender notice or the balance amount thereof, as the case may be, shall, to the satisfaction of the Managing Director of the District Union, be adjusted against the last instalment in accordance with the provisions of Clause 10 of this Agreement.” 10. Clause 13 of purchase agreement deals with the termination of agreement. Relevant portion of the clause is reproduced hereunder: 13 “(13) TERMINATION OF BUYER'S AGREEMENT (I) If the purchaser fails to pay the first two installments or the third installment before the due date of the fourth installment or the last installment within 15 days from the due date or any other amount due or fails to comply with any of the provisions of this document, then without prejudice to any other rights and remedies which the Chief Conservator of Forests may have, the Chief Conservator of Forests may, in his discretion, terminate this agreement by giving a notice of fifteen days to the purchaser and giving him an opportunity of being heard and may blacklist the purchaser for a period up to five years. (II) The order terminating the agreement shall be served on the purchaser personally or sent by registered post. The termination of the agreement shall take effect from the date of the order terminating the agreement. (III) On termination of the Agreement, the Federation shall be entitled to:- (a) confiscate the entire amount of the security deposit. 14 (b) confiscate in favour of the Federation the stock of tendu leaves lying in the warehouse for which payment has been made but delivery has not been taken. (c) (i) sell the stock of tendu leaves lying in the warehouse for which the amount due has not been paid and the stock of tendu leaves lying in the warehouse which has been confiscated in favour of the Federation under condition No. 13 (III) (b) and recover the loss. Such loss shall be recoverable by encashment of bank guarantee submitted by the buyer under clause 7, if submitted, as well as by sale of tendu leaves kept in the godown for which the due amount has not been paid and also by sale of tendu leaves kept in the godown which have been confiscated in favour of the Federation under condition no. 13 (III) (b). If the lot is not resold in the first tender/auction after the order of termination of the agreement or the tendu leaves are destroyed by fire before the approval of resale, then the sale price of the lot shall be considered zero and action shall be taken to recover the loss from the buyer. If the lot is resold in the subsequent tender auction, then the purchase price received or the amount received from insurance shall be adjusted in the amount of loss. If the loss has been recovered, then in such a case the 15 purchase price received shall be paid to the buyer but no late fee shall be payable to the buyer on such amount. In case of termination of the agreement, the calculation for recovery of loss from the first buyer will be done as follows: Prospective receipts including all taxes from the relevant tender auction (+) Expenses of warehouse, supervision etc. till re-disposal (-) Receipts including all taxes from subsequent tender auction (-) Amount received from confiscated tender and security deposit. (i) Even after this, any loss shall be recovered by the buyer as arrears of land revenue, (iii) If on such resale, more amount is received than the amount payable for the sale, then the buyer shall be entitled to recover the entire amount and the buyer shall have no right or liability over it. (d) To recover all the costs incurred and expenses incurred for recovery of loss, (e) To recover all penalties imposed and compensation determined which have not been paid, 16 (IV) (a) If after the expiry of the agreement and before the action of resale of leaves, the defaulter/buyer pays all the money payable to the union which will include the amount dues late fee, all due taxes and cess, imposed penalties and revival fee at the rate of Rs. 10,000/- per lot etc. 10,000/- per lot etc. is paid in full in the office of the Managing Director, District Union, then the Managing Director of the Union may revive the said agreement and extend the agreement period if necessary and the undelivered stock of tendu leaves shall be delivered to him only after full payment of all the dues and revival fee as aforesaid. The buyer has to pay the godown rent in advance as per clause-5(f) before taking delivery, if the period of revived agreement extends beyond the original date of expiry of the agreement period. (b) If the buyer does not want to avail the facility mentioned in condition no. 13 (IV) (A) and wants to avail the facility of installment payment of the remaining serial price of the lot, then on the application of the buyer, the Managing Director of the Federation may, at his discretion, give the facility of installment payment to the buyer and revive the said agreement, but in this case the buyer will have to pay late fee at the rate of 0.045% per day on the amount payable for the delayed period from the date of 17 installment due, all the due taxes, cess and the amount of imposed penalties and revival fee at the rate of Rs. 10,000/- per lot. The dates of revised instalments and the delivery period may be determined by the Managing Director at his discretion. (V) Whenever the agreement is revived, the security deposit forfeited due to termination shall be automatically restored. (VI) However, if the agreement of the buyer has not been terminated and the period of agreement has expired, then before the process of resale of the leaves, all amounts payable by the buyer to the Federation which will specifically include amount due, late fees, all taxes and cess due, penalties imposed and extension fees @ Rs. 10,000/- per lot and godown rent @ Rs. 5/- per actual bag for every month or part thereof from the expiry of the agreement period, are paid in full, then the Managing Director of the Federation may, at his discretion, grant permission to remove the tendu leaves on a written application by the buyer.” 11. Show Cause Notice dated 16.03.2021 mentions thus: 18 "If you are willing to take the remaining lot of the said lot, then after paying the entire amount due, apply through the proper channel for revival of the contract. Also, within fifteen days, present your side as to why your name should not be blacklisted for the next five years due to violation of the terms and conditions of the agreement and creation of proceedings for termination of the agreement." 12. From perusal of the records, it is apparent that the petitioner has applied for purchase of Tendu Leaves of lot in question while offering rate of Rs.5825/-. The rate was accepted as such the agreement was executed between the parties. She was directed to deposit the amount. When the amount was not deposited notice dated 18.11.2021 was issued. She was granted an opportunity to revive on depositing the entire amount. Several communications were exchanged between the parties. On 13.1.2021 show cause notice was also issued to the petitioner for depositing the amount and if as per the agreement the amount is not deposited as per condition No.13(i) of the agreement would not be done and the amount will not be deposited within 15 days appropriate action will be taken. It was specifically stated that it be treated as notice in accordance with law. However, when, despite several notices, the petitioner has failed to deposit the amount, the agreement executed between the parties was cancelled and the amount of Rs.3,75,000 has been forfeited vide order dated 16.3.2021. 19 Though the petitioner has challenged the order of black listing on the ground that she has not been given notice and as she has not been granted opportunity of hearing, but from perusal of the documents appended with the petition as well as from the reply filed by respondents No.3, 4 and 5, it appears that several notices as indicated above have been issued. The petitioner herself has written some letters. In one occasion the agreement was revived, however, the petitioner again failed to deposit the amount. As such the petitioner cannot claim that she has not been granted opportunity of hearing. Though the petitioner has cited judgments of the Hon’ble Supreme Court stating sufficient opportunity has not been granted to her, however, from perusal fo the case in hand it appears that sufficient opportunities were granted to the petitioner. On several occasions notices were issued to her for depositing the amount, but, she has not deposited the amount. As such the case cited by the petitioner seems to be not applicable in the present case. Had it been a case when the petitioner was not issued any notice at any point of time and a direct order of black listing would have been passed then the things would have been different. But, in present matter time and again respondents authorities have informed the petitioner by way of notices that she is required to pay the amount as per conditions of the agreement. On the request of the petitioner, the agreement was also revived. However, in spite of giving opportunities when the petitioner has failed to deposit the amount the agreement was cancelled and the order of black 20 listing was passed. Nowhere it was the case of the petitioner that in earlier occasion she has not been informed. There are specific notices stating that if the conditions of agreement will not be complied with appropriate action as per terms of agreement will be taken, however, the reasons best known to the petitioner the amount has not been deposited. As such from all angles, this Court is of the view that sufficient opportunities were granted to the petitioner as such the petitioner cannot claim that due to lack of any specific notice the order of black listing is not in accordance with law. 13. Accordingly, the writ petition is dismissed. Sd/- (Amitendra Kishore Prasad) JUDGE Gopal Singh